Oakland faces a crippling $42.6 million budget deficit for the upcoming fiscal year, and city officials are considering asking voters to approve two new taxes this November to help fill the gap.

The discussion among city officials about whether to ask voters to balance the budget is already contentious. Some believe the city has no choice, particularly given voter mandates and other budgeting requirements that leave only 8 percent of Oakland's $420 million budget discretionary.

The possible new taxes outlined in a report released Friday by the city's budget office are:

-- The utility users tax, which would require approval by a simple majority of voters. It would extend the tax to water service and raise the rate from 7.5 percent to 8 to bring in $2.4 million to the city. Comparable rates are 7.5 percent in Berkeley and 8 percent in El Cerrito, according to the budget office.

-- An $18.2 million public safety parcel tax, which would require a two-thirds approval from voters. Each residential parcel would be taxed roughly $180 a year - or $15 a month.

The alternative to new taxes is laying off police officers. In a department budgeted for 803 officers, the city would have to lay off about 100 officers to make a dent in the budget. Since bulking up the Police Department to a historic high of 837 officers in late 2008, the city has had a steady decrease in crime for 15 straight months, despite having only 777 officers now.

"It's a hard time to go out and ask people to dig into their pockets because everybody is hurting," said City Council President Jane Brunner, acknowledging that polls don't show the measures succeeding. "But it's clear to me that nobody wants to lay off 100 police officers."

"That's the old-fashioned way, the way we've done it before: go to voters for more money," he said. "We have to look at the way we do business. I think we have to cut entire programs that we are not required to provide."

Among other things, De La Fuente said he would sell the city's two golf courses and consolidate office space so that the city no longer rents from private landlords. He also said that police and fire cannot remain a sacred cow.

"We cannot continue dismantling every other service without touching police and fire," he said.

The city is facing the continued shortfalls despite enacting about $170 million in budget balancing measures since June 2008.

The budget office report also says the city has a pressing $10.4 million budget gap for the current fiscal year, ending June 30, for which city staff propose restructuring some pension payments and selling a parking garage next to Summit Hospital.

The budget office cited a number of reasons for the $42.6 million deficit for the 2010-11 fiscal year.

Most of it comes from a $25.6 million decline in tax revenue, including property, sales, utility consumption, hotel and parking taxes. But some of the trouble is because many cuts haven't been as fruitful as thought.

The city has cut about 12.5 percent of its staff since 2006. But personnel costs have only decreased 3 percent due to the rising cost of benefits.

All elected officials except City Auditor Courtney Ruby plan to take 15 percent cuts to their budgets. The budget report also proposes selling a number of buildings, including the Henry J. Kaiser Convention Center, to balance the budget for the current and next fiscal years.